2022 Carbon Credit Crunch Report

About this research report

In June 2021, we published our first Carbon Credit Crunch Report. We noted there was a considerable uptick in the volume of credits issued and retired. We also predicted that the market paradigm of demand outpacing supply would create upward price pressure and a scramble for quality credits.

This proved to be correct. In November 2021, the value for the 2021 voluntary carbon credit market breached $1billion, making headlines in major publications including BloombergNEF, Financial Times, and S&P Global.

We conducted our analysis again at the start of 2022 to see how 2021 wrapped up and what we could expect in the year ahead.

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Why are voluntary carbon credit prices increasing?

Consumers, shareholders and investors have a growing interest in ESG performance, driving new entrants with deep pockets to VCMs. Another unexpected source of demand: the carbon crypto movement.

What will be the impact of higher carbon credit prices?

Increased carbon prices put corporate net zero commitments - and organizations that fail to adapt to the new paradigm - at risk. Companies must prioritize reducing emissions now, not later.

Which key trends will impact VCMs in 2022?

Higher credit prices and greater scrutiny might increase credit quality and quantity, as developers will be encouraged to set up more projects. Expect innovation in this space to unlock new project types as well.